Posted January 25, 2013 by David H in World

Global Regulators Believed to Ponder Delay of Derivative Margin Rules - JPM, DBK & LEHMQ

Northern, WI 1/25/2013 (avauncer) - Global regulators are likely to delay rules to lower market risk by asking banks to ask for collateral against swaps not cleared from being made fully effective up to 2019. According to the Basel Committee on Banking Supervision, they will ask for extra comments during this year on the  new draft for collateral rules applicable for companies. These include JP Morgan Chase & Co. (NYSE:JPM) and Deutsche Bank AG (ETR:DBK).

The ultimate document, previously planned for publication towards the end of 2012, will be presented sometime later this year. And the step might introduce the implementation of rules from Jan. 1, 2015 to Jan. 1, 2019. U.S. and EU regulators have an uphill task of streamlining rules for the market of over-the-counter derivatives worth $639 trillion. This was necessitated by the fall of Lehman Brothers Holdings Inc. (PINK:LEHMQ) in 2008.

The rules have already been laid down by the Basel committee that would require the banks to hold excess of triple the capital. Regulators have stated that the draft for collateral rules would stop firms from taking advantage of the rule variations amongst nations. Last year’s draft laid down an incomplete list of assets to be considered as collateral. These comprise of gold as well as certain equities. In this draft version, methods for computing the writedowns applicable to these securities were also laid down.

The Basel committee and the International Organization of Securities Commissions are working in tandem in designing  the collateral rules. The committee is located at International Settlements and comprises regulators from 27 countries including UK, USA and China. IOSCO is a platform for market regulators from over 100 nations to make rules and share data.

 The shares of JPMorgan Chase & Co.(NYSE:JPM) were up by 0.30% to close at $4637

David H

David H. Steinberg grew up in West Hartford, Connecticut, entered Yale at age 16, and earned his law degree from Duke University, where he served as editor-in-chief of the law review. After four years of entertainment law in Atlanta and New York, he abandoned his legal career to attend U.S.C.’s Peter Stark Producing Program. Steinberg broke out as a writer in 1999 with his teen comedy SLACKERS that ignited a bidding war for the script. The movie starred Devon Sawa, Jason Schwartzman, and model Jaime King and became an instant cult classic.